Remarks Announcing the Administration Proposal for an Agriculture Payment-in-Kind
Program

December 9, 1982
The President. I have just completed a meeting with the Cabinet Council on Food and
Agriculture, where we had an extensive discussion on the challenges facing farmers.

Secretary Jack Block pointed out that a weak demand for crops and large supplies have created
difficult conditions for farmers. I should have been a little slower there in reading that particular
statement. I made it sound like the weak demand for crops and large supplies ran together there.
We have large supplies, and at the same time, we have a weak demand for crops.

In response to this situation, acreage reduction and diversion programs for 1983 were announced
early by the Agriculture Department to provide farmers with maximum time to plant their crops.
However, recent developments indicate that there may be an even larger imbalance between
demand and supply for the coming year so that additional steps are needed. Secretary Block and
others at the U.S. Department of Agriculture have been working hard in recent weeks and have
come up with a highly innovative approach that will enhance long-term prospects for a recovery
in the farm community.

This morning I have authorized the Secretary to propose to the Congress on behalf of the
administration a new payment-in-kind program. Under this program, participating farmers would
be eligible to divert additional acreage into a soil-conserving use. They would then be paid in kind
from our bulging government surpluses. In other words, they would be paid in bushels of the
same surplus commodity they might otherwise have grown. These farmers would then have full
discretion to feed, sell, et cetera, the commodity received as payment in kind.

As Secretary Block has pointed out, this new payment-in-kind approach has several significant
advantages. Production can be reduced, thus bringing supply back into closer demand with
balance. Stocks can be reduced at the same time, lessening the overhang on the market at harvest
next year and enhancing the prospects for a market-led recovery in farm prices and incomes in
future years. The availability of market supplies will be maintained, signaling that the United
States will continue to be a reliable supplier. Government outlays on farm programs should
decline, and sound conservation practices would be applied.

In short, Secretary Block and his team have come up with a good, imaginative program, and I'm
pleased that we can go forward with this announcement today.

Now, the Secretary is due on Capitol Hill to testify in a few moments, and I am due about 4
minutes ago for a meeting with Ambassador Habib, who has returned from the Middle East for
this very purpose of briefing us. So, I am going to leave, but I thought that Jack might be able to
take a few moments to speak with you for a moment before he has to go up on the Hill.

And, Jack, I'll turn it over to you.

Reporter. Mr. President, why should the Senate approve the MX when a majority of your Joint
Chiefs opposed it and say they find it difficult to understand the basing plan?

The President. I think that's been a little distorted, because the same Joint Chiefs -- well, one or
two at most -- had different ideas that they thought might be better with all the confusing things.
They did agree that if this was the method I chose, they would be in support of it.

Note: The President spoke at 11:58 a.m. to reporters assembled in the Briefing Room at the
White House. Following his remarks, Secretary Block answered reporters' questions.